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Ukrainian Grain Market Profile

Grain  production  is considered  Ukrainian strategic production direction, due to grain being  most important foodstuffs resource in Ukraine (as well as in most other countries). At time of the USSR, Ukrainian flour production was attributed especial attention to. At that time Ukraine was charged with mission of supplying flour to a number  of «fraternal» republics; at  that  time a great deal of bakery integrated plants  were constructed and  there was  no special problem as for finding up resources to assure those  integrated plants  proper   functioning.  For instance, in 1990-es second half Ukrainian grain output totaled 41.5–51.5 million tons, with wheat annual output amounting to 18.4–27.4 million tons (food wheat ≈ 60–70%).

Table 1 shows Ukrainian recent years grain production dynamics.

Within 1990-es second half wheat output situation had radically changed: wheat output declined over twice. In 2001/02 wheat output started recovering, yet in 2003  it fell to record low.

Grain production lowering as well as last 50 years Ukrainian record low wheat crop were due to massive winter sown grains frost destruction as well as vegetation  period climatic  conditions significant  worsening.      

Presently in Ukraine gradual recovery of all grains (incl. wheat) output, alongside with general economic positive  changes, is noticed.

Fig.1.  Ukrainian grains  output,  million tons

Table 1. Ukrainian grains/legumes  production structure (million tons)
 

1999

2000

2001

2002

2003

2004

Total grains  

24,7 

24,4 

39,7 

38,8 

20,2 

41,7 

Wheat 

13,6

10,2

21,4

20,5

3,6

17,5

Barley

6,4

6,8

10,1

10,4

6,8

11,1

Rye

0,9

1,0

1,8

1,5

0,6

1,6

Maize  

1,7

3,8

3,6

4,1

6,9

8,8

Oats

0,8

0,9

1,1

0,9

0,9

1,0

Legumes

0,4

0,5

0,6

0,6

0,6

0,8

Millet

0,2

0,1

0,2

0,1

0,3

0,5

Buckwheat

0,3

0,5

0,4

0,2

0,3

0,3

Other grains

0,4

0,6

0,5

0,5

0,2

0,2

Ukrainian consumption fund includes  grain for  flour milling, groats, brewery and spirit industries. Thus, in particular  flour and groats production required correspondingly 5.7–6.0 million tons and ≈ 0.8 million tons  grain annually.

 Naturally, wheat is prevailing in grain consumption fund;  food/feed wheat  proportion differs depending on regions, due to different soil and climatic conditions. In southern regions food wheat proportion is, as a rule, higher against other regions. Until 1996,  in Ukraine there was State grain ordering system, with food grain prevailing in its structure. Most flour millers at that time were  processing grain received from State grain  orderings system, thus assuring their stable  resources supply.

One of  recent years Ukrainian domestic market  specifics is  growing tendency of  supplying  Ukrainian rural population with grain as labour payment in kind (besides, individual agrarian economies  are rising their own grain output as well). As a result, due to   individual agrarian economies getting increasingly more  supplied with grain, certain  food/feed grain misbalance  has appeared on domestic grain market: thus, individual agrarian economies, having  piled enough 3 class wheat, often use it as fodder (and vice versa).

Grain Processing

Flour

           

Wheat flour is  main flour  produced in Ukraine, yet, except it, some other flours (firstly  rye and maize) are also  produced. Besides, buckwheat, rice and oats flours are  produced as well, though at small scale. Table 2 shows  data on Ukrainian production of  some kinds/sorts  flour  (for domestic  flour millers which  made reports  to  State Statistics  Committee).

Table 2.  Ukrainian   flour  production structure  as for  kinds of flour (thousand tons)
 

1999

2000

2001

2002

2003

Total flour   

3373 

3067 

2984 

2986 

2819 

Total wheat flour

3050

2710

2686

2724

2540

Total rye flour

303

354

289

252

269

Total maize  flour

9

9

5

6,7

4,5

Feed flour    

2495

1726

1718

2018

1363

         Data source: Ukrainian  State Statistics   Committee

As to official statistics, wheat flour output  shared  90–91%  of

2001/03 Ukrainian  total  (as to analysts, this index can reach 95%).  Rye flour output holds an important place in Ukrainian total,  -  8–10% (or 5% as to non-official data). Production of other kinds flour  doesn’t influence much Ukrainian total.

Mixed Feeds

There were significant changes in last years mixed feeds production:  thus, due to poultry mixed feed output growth, in 2003 there were no seasonal  output fluctuations, — what is explained by fact of poultry industry demand being influenced  only with poultry number, not with  seasonal shortening of concentrated fodder  consumption (as it is the case with pigs/cattle breeding due to pig/cattle coming over to succulent fodders within summer period).

Together with mixed feeds quantitative growth as well their quality rise is

admitted: thus, within  last year microadditives/protein-vitamin additives  mixed feeds output has substantially risen.

Leading domestic mixed feed producers  presently remain the same as within previous

years.  It is to be admitted, within last year  poultry  mixed feeds  companies output has sharply grown, while  pigs/cattle mixed feeds  companies output has declined or remained unchanged. Significant mixed feeds  output growth is noticed at  Complex Agromars,  Constanta-Agro,  Grakovskiy KHP   and  Dykanskiy    ÌÊÊZ.

     Table 3.  Ukrainian mixed feed  output  as for kinds of  mixed feeds  (thousand tons)

 

2000 

2001 

2002 

2003 

In total  

1126 

1255 

1810 

1892 

For poultry

591

722

980

1172

For pigs

346

333

570

513

For cattle

176

176

236

186

For fish

6

22

20

15

Others

7

2

4

6

Groats

Domestic  groats market is divided into two parts: groats produced  at specialized companies (65–70 % market) and groats produced at small hulling mills,  in  home-made  way (30–35% market). Constant output growth of home-made  groats is due to lower prices offered  by small hulling mills owners (yet  groats quality in most cases is  much lower).

Groats produced at small hulling mills  are consumed mainly by rural population as well as  district centers inhabitants, while higher quality groats are offered  in  big cities as well export shipped.          

Most  experts estimate annual domestic  groats  market capacity 450–500.000t. Due to domestic groats  import being  most insignificant  (1.100–1.500t yearly + 70.000t rice  groats  yearly) as well as annual export  equaling to 60.000–70.000t, it is  possible to  assume, that 110.000–130.000t groats, which are presently  missing in official statistics, are supplied to market exactly by small hulling mills owners.

As to State Statistics Committee,  last two years  groats output  is gradually declining, due to  recent years main groats crops failure  as well as shadow   groats production  growth.  It is to be mentioned, within  recent time buckwheat groats output  share is gradually  rising up in groats total output, due to buckwheat groats domestic/export demand  growth. Though  2003 buckwheat groats output  share has sharply declined (due to buckwheat  crop failure),   it can be considered just a temporary phenomenon and buckwheat output  recovery is expected to take place in 2004.  Buckwheat groats and ground/broken  peas  are main Ukrainian exported groats, sharing 70–75% total Ukrainian groats export.

Table 4. Ukrainian groats output (thousand tons)

Product  

1999 

2000 

2001 

2002 

2003 

Total groats  

344,4 

293,7 

300,5 

295,7 

245,5 

Buckwheat groats

126,4

108,1

143,5

145,2

101,9

Peas

31,8

28,6

25,3

14,2

13,3

Semolina 

19,5

17,6

17,3

23,5

18,9

Pearl barley groats,wheat  groats, fine  barley groats

82,8

73,9

41,6

49,9

46,0

Millet

30,4

19,5

19,5

13,4

11,7

Others

53,5

46

53,3

49,5

53,7

Data source: Ukrainian  State Statistics   Committee

Export Trade

Feed wheat /barley remain Ukrainian main export grains (over 85% total export), due to their domestic output  being the highest and world competency the lowest. Ukrainian grains are exported mainly to Mediterranean countries (if high crop  years are taken into  consideration).

Most stable export grain is  barley, due to its low domestic consumption as well as  relatively  high resistance against unfavorable weather conditions.

Ukrainian maize crops/exports are growing up as well.

Within low crop years, however,  main export grains are spring sown grains, due to their being less vulnerable to  unfavorable weather conditions than winter sown grains.

Within last years Ukrainian grain export market shortening tendency is appearing, due to Ukrainian grains high prices as well as East European and Mediterranean countries having joined  EU. Besides, Ukrainian grains practically aren’t exported to South Asian countries (South Korea, Indonesia, Philippines, Japan), due to Australian expansion on that market.

That’s why 2003/04 MY Ukrainian groats export geographical range  has significantly narrowed  against previous years. This tendency  is most probable to remain within next season.

Maize export is presently the most rapidly growing one, due to maize  crops boosting as well as  agrarians  preferring to grow  it owing to active demand and high prices. Within this season Ukraine will export over 1 million tons maize (absolute record), mainly due to  significant demand on part of Russia, Hungary and Romania, — yet within next season situation can cardinally change and Ukrainian maize will be remained unwanted.

Table 1. Ukrainian grains export (1998/99 — 2002/03 MY)

Season/Product 

Wheat    

Barley  

Rye  

Maize  

Others  

In total  

1998/99

4351

814

123

472

81

5841

1999/00

1908

783

171

62

49

2973

2000/01

80

1023

2

403

58

1566

2001/02

5503

2810

292

299

98

9002

2002/03

6625

2950

286

856

28

10745

2003/04*

10

1300

0

1000

100

2510

Table shows, that wheat exports are sharply fluctuating, due to wheat crops fluctuations.

Since most wheat  grown in Ukraine is winter sown wheat,  it is subjected to  frost destruction, damping-out, etc.  The same concerns rye. All other grains are  spring sown, what assures crops/exports certain stability.

22.06.2005



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